Chamber and committees

I am very happy to give it. The bill specifies the reporting requirements on Government to Parliament, but we will be very happy to discuss with the committee the best way of ensuring that it is involved in discussions.

Good morning to colleagues across the committee. I am grateful for the opportunity to speak on the Cost of Living (Tenant Protection) (Scotland) Bill, which we introduced in the Parliament yesterday, and for the committee’s agreeing to take evidence at very short notice. My colleagues and I listened to the first panel of witnesses, and I am grateful to all those who have contributed to the debate.

As members are aware, the emergency bill aims to provide critical temporary protection for people who rent their homes. On average, tenants have lower household incomes, higher levels of poverty and are more vulnerable to economic shocks. Sixty-three per cent of social rented households and 40 per cent of private rented households do not have enough savings to cover even a month of income at the poverty line. That is compared with 24 per cent of households that buy with a mortgage, and 9 per cent of those that own outright. Tenants are, therefore, particularly exposed to the cost crisis.

With that context in mind, the bill has three key aims: to protect tenants through stabilising their household costs by freezing rent; to reduce the impact of evictions on homelessness, through a moratorium on evictions; and to avoid the eviction of tenants in the private rented sector by a landlord who wants to raise rents between tenancies through the temporary measures, and to reduce unlawful evictions.

The provisions are intended to be in place until 31 March in the first instance. With the approval of the Parliament, the Scottish ministers can extend them for two further six-month periods, should circumstances and evidence show that to be necessary. Similarly to the approach to the coronavirus emergency legislation, the on-going necessity and proportionality of the provisions will be reviewed and reported on. Regulations to suspend or expire any provision that is no longer appropriate must be made.

I know that time is limited, but I want to give a very brief overview of the main provisions in the bill. First, we intend to achieve the rent freeze by setting a variable cap on the level of increase in rent. Initially, that will be set at zero per cent until 31 March next year. The cap will operate separately for the social and private rented sectors and will apply to all rent increase notices that were served on or after 6 September—the day of the programme for government announcement.

To reflect the various circumstances that landlords might face, we have allowed for applications to increase rent for prescribed and legitimate costs that are associated with offering the property for rent, when those costs have increased. Rises are restricted to a maximum of 3 per cent of rent, although ministers will have the power—subject, again, to Parliamentary scrutiny—to propose a change to that percentage.

Recognising that some of the most economically vulnerable people live in the social rented sector, we believe that it is an important signal of equal protection to cover both sectors. However, to reflect the critical differences in the nature and structure of the social rented sector, we are already working closely with the sector to consider what should happen after 31 March.

On the moratorium on eviction, we intend to prevent enforcement of eviction action in the private and social rented sector and in college and university halls of residence and purpose-built student accommodation. Those restrictions will apply to all eviction orders that are issued in proceedings that are raised after the moratorium comes into force. They will also apply to proceedings that are raised before the moratorium comes into force where the eviction notice was served on or after 6 September. The moratorium will not apply to eviction orders that are granted in proceedings before the legislation comes into force, which will ensure that no one is evicted in a case that is started after or as a result of the programme for government announcement.

Recognising that the cost crisis is impacting on some landlords, too, we have allowed for specific limited exemptions to deal with serious cases of antisocial or criminal behaviour, substantial levels of rent arrears and a property being repossessed and sold by a mortgage lender.

We know that the majority of landlords are law abiding and responsible and are appalled and frustrated by those landlords who try to bypass the law to evict people unfairly. To guard against that, the bill makes important changes to the way in which civil damages can be awarded for unlawful evictions, making it easier for tenants to challenge them and, by substantially increasing the potential damages, making it less attractive for landlords to carry them out.

Finally, the rent adjudication provisions in the bill look ahead to a time when, hopefully, we will be transitioning out of the emergency measures as economic circumstances change. That part of the bill gives the power to adjust the adjudication process to avoid a cliff-edge effect. Again, that will be subject to parliamentary scrutiny.

To summarise, the proposed legislation will help to keep people in their homes and to stabilise their housing costs during this extraordinary cost crisis. We believe that the package of measures strikes the right balance between that aim and ensuring that landlords can continue to offer properties for rent and manage tenancies sustainably.

I look forward to the committee’s questions and the discussion.

I was pleased that, in one of his first answers, Aaron Hill acknowledged that an emergency response is necessary. The desire to protect tenants is shared by the Government and the sector. Social landlords are non-profit organisations; they exist to provide affordable housing. We recognise that a huge amount is being asked of the sector, generally, in terms of provision of supply, maintenance and the retrofit agenda to address the net zero challenges that the whole Parliament has agreed are important.

It is important to recognise that there are significant factors that operate differently in the social rented sector compared with the private rented sector. There are existing requirements to consult with tenants on rent setting, and rental income is reinvested in provision and quality. A higher proportion of tenants in the social rented sector access benefits, so any prolonged and extended rent freeze would benefit not the tenants but the UK Treasury.

We are conscious of all those differences and more, and we are already working closely with the sector, not only to reassure it but to reassure its lenders that the Government will take a proportionate and responsible approach. The SFHA and others have been invited to, and have agreed to participate in, a short-life task and finish working group that will look at those issues. The group has already begun meeting and those discussions have been very constructive.

I know that some people in the social rented sector have concerns, but I have also spoken to many who see a positive opportunity to ensure that we are protecting tenants at a very difficult time. As I told Parliament last week, no decision has been made about what will happen to the cap after 31 March. We will make that decision in a responsible way, bearing in mind how economic circumstances change over time and the arguments and discussions that we take forward the social rented sector.

Yes. As the member is aware, the Government needs to satisfy itself about the advice on that point of legal competence, as does the Parliament and the Presiding Officer, before a bill is introduced.

Absolutely. We will make every effort that we can to do that. It is something on which we can engage actively with the committee. For example, with the reporting provisions in the bill—assuming that Parliament approves it—the committee might want to write to us ahead of time to flag up the specific questions that you would want us to cover, either in the report that will be published or in the discussions that we have with the committee.

What we have set in the bill is, as I said earlier to Willie Coffey, six months of rent in relation to the private rented sector and a specific figure, which is roughly equivalent to six months of social rent, in the social rented sector.

I come back again to the point that I made earlier: the intention of setting a zero per cent cap until the end of March would not have a direct impact on rental income in the social rented sector because that sector does not have constant in-year rent increases; those tend to happen at the start of the financial year. We are working closely with the sector to understand all the implications, the way that it works and the impact that any future decision on the rent cap would have on its business model. We are also working with it to give assurance and confidence to its lenders.

The need for investment in provision of affordable social housing, in repairs and maintenance and in net zero, as well as in the other services that Miles Briggs rightly highlighted in his earlier question, are all important points of common ground between the Government, political parties and the social rented sector.

We must recognise that net zero investment is absolutely in the interests of tenants, too. I have spoken to social rented sector tenants who are now paying peanuts in energy bills after investment has been made not just in energy efficiency but in zero emissions heating systems, communal heating systems and so on.

We want to see much more of that. The Scottish Government is already committing substantial investment to support such work in the social rented sector. We are working closely and collaboratively with social landlords, many of which have been leaders in the field. We want such work to continue, and I am certain that it will.

Indeed I can. It is important to acknowledge that landlords, particularly those in the private rented sector, are not all in the same financial circumstances. Some are very large and profitable. Others, as John Blackwood said, are people who have for whatever reason, perhaps unintentionally, found themselves letting out one or two properties. Some of them will be facing the cost of living crisis and will be worried about their circumstances.

We have included versions of the existing grounds for eviction that are to do with the intention to sell or to live in a property, but the adapted versions that we are including on a temporary basis in the emergency legislation concern the landlord’s intention to do that to address their own financial hardship. We will work with the tribunal on how that is implemented.

Obviously, we do not want a landlord who would face the risk of severe debt or even homelessness to be unable to take action, so those limited and prescribed forms of eviction grounds will be included, and you can see that in the text of the bill.

Yes. We are defining “substantial rent arrears” as up to or the equivalent of six months’ rent in the private rented sector. We are using the specific figure of £2,250 in the social rented sector, which is roughly equivalent to six months’ average rent in that sector. Amanda, do you want to comment?

Thank you, convener, and good morning to colleagues.

I am here to provide an update on the actions taken following my attendance at the committee on 1 March, when the committee considered the revised Scottish social housing charter.

In response to the Delegated Powers and Law Reform Committee’s query about our consultation with secured creditors of registered social landlords or their representatives, the Accounts Commission and the Equality and Human Rights Commission, I can confirm that we wrote to all eight statutory consultees in the Housing (Scotland) Act 2010 to ensure that there was no dubiety about the compliance with the duty to consult on the charter. We sought their views on the revised charter and provided the same 12-week response period in line with the original full consultation. We received responses from all statutory consultees, including secured creditors of registered social landlords, UK Finance, the Accounts Commission, Audit Scotland and the Equality and Human Rights Commission.

The overwhelming response from all the statutory consultees was that they were content with the changes that had been made to the charter. In light of some additional comments that they provided, we have made some further minor changes to the version of the charter that the committee considered in March. We have added to the equalities outcome the need for landlords to eliminate discrimination and advance equality of opportunity; revised the wording of the quality of housing outcome to provide additional clarity; changed the value for money outcome from a standard to an outcome; and highlighted the legal requirement to consult tenants on rents and service charges in the supporting narrative.

I trust that those actions provide the committee—as they have to the DPLRC—with assurances of compliance in relation to consultation with statutory consultees in the review of the charter.

The charter and the regulator’s reports provide an improvement framework for tenants and landlords to assess and compare landlord performance, and encourage landlords to deliver improved services for their tenants and other customers.

Finally, as I think I did in March, I want to place on record my thanks to the officials who have worked on what has proved to be a highly successful tool for improving services in the social housing sector, as well as my thanks to all those in the sector and others who have engaged with the consultations. I hope that the committee is content with the revised charter and that it will recommend that Parliament approve it.